Analysis of Innovation Management at Tide Digital Bank: A Report

This report examines the innovation management strategies of Tide Digital Bank, a prominent fintech company providing mobile banking services to small and medium-sized enterprises (SMEs) in the UK. The report begins with an introduction to the concept of innovation management and its significance in the business world. The main body of the report delves into the disruptive innovation theory, explaining how new entrants can challenge established businesses. It then analyzes the historical development of Tide Digital Bank, highlighting its innovative approach to providing digital banking services and its impact on the market. The report also discusses potential threats and opportunities for the bank based on the disruptive innovation theory. Finally, the report provides recommendations for possible future developments, including strategies to enhance innovation management and maintain a competitive edge in the evolving fintech landscape. The analysis covers the bank's evolution, its use of technology, and its responses to market changes, emphasizing the importance of continuous innovation for sustained success.

Managing innovation Tide
digital Bank

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Disruptive Innovation theory.......................................................................................................3
Historical development of product and services Tide digital bank.............................................5
Recommendations of possible future developments...................................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
In every business in today’s market people listen and say the term ‘innovation’. This has
become the major topic in business world. There are many different form of concepts related to
the topic but very little consensus about having an effective innovation management (Nambisan,
and et.al., 2017). Innovation is an idea of introducing something new and innovation
management is handling these activities. Tide digital bank is headquartered in London, United
Kingdom and comes under FinTech industry. It is a financial technological company which is
providing its customers in small and medium enterprise with first mobile banking services. Tide
digital is one of the first finance platforms to go digital. There have been many theories about
innovation and the company is using one but there can be some suggestion to improve their
innovation management helping them grow.
MAIN BODY
Disruptive Innovation theory
Disruptive innovation is a way to describe how the entry of new entrants into the market
world can disrupt an established business. There are many start-ups emerging in the market with
a goal of changing the working condition in their respective markets. Disruptive innovation
theory will help both disruptors and disrupted to understand and spot the potential opportunities
and threats for their business. It is a process by which a smaller company who are able to
challenge an established business. The process includes starting from bottom of the market and
then continuing to go up (Goffin and et.al., 2019). Disruptive innovation transforms highly
expensive products and services to affordable and accessible form and due to this the position of
long standing and established competitors is disrupted leading to disrupted market. Technology
is used to upset the structure which is opposed to disruptive technology.
Many businesses innovate and build up their products and services to fulfil the demands
of their customers in order to earn profits and in this process they ignore needs of downmarket.
Entrants target and work on the segments which are ignored and gain traction by providing the
customers at much more reduced costs compared to others. These entrants then eventually move
to the upmarket by offering many types of solution to the customers of the incumbent businesses.
Hence, whole process causes disruption. Now, not all types of innovation can be a disruptive
innovation. As the name suggests, disruption is to interrupt a process or activity which was

working in a normal way (Maiya, 2017). Any business which enters the market and becomes
successful can come under the disruptive innovation category. It can also be said that disruption
happens when incumbents lose their customers because they kept ignoring their actual needs or
misjudge other segments of the business.
Disruption can cause a low end or form new market. Low end disruption means a
business has hit the bottom of the market is offering ‘good enough’ services to its customers.
Generally it is low profit markets for the serving businesses and therefore they try to move
upstream when new forms of businesses enter the market. These businesses move their focus to
the area which is more profitable. On the other hand, new market disruption consign to business
which compete against the companies having non consumption in lower margin parts of the
industry. The range of products is seen as just being good enough as like in low end disruption.
Emerging new businesses earn profits by having lower prices. The difference line between these
two disruptions is that, low end disruption aims on over served consumers and new market
disruptions work on underserved customers.
Disruptive innovation is part of process and not a type of product or service provided to
the customers. Innovative products launched by some companies do not qualify as disruptors in
their respective industries. Any innovation model will take some time before being a success in
the business world (Christensen and et.al., 2018). Any new innovation in an industry does not
become threat to the existing services but when these services fail to satisfy their customers, they
tend to move their focus and interest on the latest launch systems. The new innovative company
will win the hearts of the people and will siphon away the customers for organisations having
outdated business model. To evaluate the extent to which the new innovation can cause a threat,
a company must keep a close eye and understand the whole process. They must determine if their
products and services in their business approach are qualifying the needs of customers.
When a serving business is looking out for non disruptive new emerging business, then it
important to see that not all entrants are disruptive. Every new business does not disruptive the
coexisting one. If that is not the case then it s not possible to find option to shut them all down
and will result in wasting the available resources (Si, S., Zahra, Wu, X. and Jeng, 2020). And
therefore, understanding the correct meaning of the word disruption is very important in targeting
the actual threats. New participant can also benefit when they have a better understanding of
disruption as it will result in finding new opportunities to start and level the business. Be it a new

entrant or any existing incumbent both must choose their battles wisely. Weather an incumbent
looking for ways to defend its market shares and earn profits or an entrant seeking a chance to
grab a bite from the pie, both requires understanding of disruptive innovation as this approach
offers a close up to many valuable idea which can be included in the company’s business plan.
Historical development of product and services Tide digital bank
From the help of disruptive theory it has been understood that how the entry of new
entrants into the market can disrupt the business of Tide digital bank. In the market of this
business there is emergence of new entrants very often and that has affected the business of this
bank over the years. With the help of this theory the threats and opportunities can be identified
for this business. This theory also helps small business for challenging the big competitors which
are well-established. This company got its registration in 2015 and started providing financial
services in 2016. Tide was the first digital business of financial services in UK (Irene, Opute and
Ibidunni, 2019). The official launch of its mobile app was in 2017 which was a huge success for
the company. When the company introduced this application it was then and there challenging
the regular banks with its financial services. According to the disruptive theory if a new business
brings up some innovative method in an existing market its starts getting success and also the
customers. That's what was happening with Tide digital bank. A part of the success for this
application was that it allowed the small business owners to utilize the financial tools provided
by this company. These customers were able to open current accounts for their businesses by
simple scanning their ID on their mobile phone. This ease in the activities of banking made the
customers fond of this product in UK. Hence, more and more customers started using this
application. This company made sure that this application was available in all the mobile phones
and also on computers. Thus, this application was available on iPhone and android devices.
This theory of innovation also motivates the small business for investing the earning for
improving its business even more. Tide digital bank also did the same by investing in by
investing in the Anthemis and Creandum which are special fintech funds (Walker and Morris,
2021). This helped the company for securing lots of funding in the future. Some time after that
Tide announced its partnership with an online lender based in Europe IWOCA. This helped the
company launch its first loan program with the name of Tide Credit in 2017. This company was
providing a credit of £150,000 just with the help of an application. All these things where so
useful for the upcoming success of the company. The customers where very pleased from the

services of this digital bank. By providing the loan facilities on mobile the company
automatically generated opportunities for development of business in the company. This was
because that many customers did not like the lengthy procedures which they had to go through in
a bank for availing a loan. With the help of Tide digital bank many customers where able to avail
loans easily and also very effectively. This is how this small business was entering the market for
big already established companies. The main concept of this theory is about an innovative idea
which will win the hearts of the customers and will take away the customer base for
organizations having outdated business model (Haefliger, 2020).
According to this theory these innovations which the company made in the services
provided to the banking customers can also become a threat to it. The whole idea of providing
online financial services was great by the company. However it needed to analyse it services very
carefully in order to inspect the possible threat which could have developed. The threat which
could have arised from digital banking products of Tide digital bank were,
Unencrypted Data :
The data of the customers with the bank were unencrypted, meaning that while providing
the data to the application of the company the customers had the risk of leaking their data to
other application in their digital devices for example camera.
Malware :
In physical banking the issue of malware are not there, but in digital banking malware
which viruses can also affect the data stored in the application of the person. This can cause
issues which the customers of this bank were not ready. For example, all information getting
deleted, unnecessary transactions.
Third party services :
In the mobile phones there are many applications which provide different kind of
services. The issue with that is that the digital banking application hold very crucial and
monetary informations of the customers. These third party applications have the access of
services very similar to Tide banking application (Beh, 2019).
For tackling these threats in the digital banking services of the company, it gave
instructions to its IT team to make the application as secure as possible. This was important for
the company to do because there was the risk of leakage of information, money and also the
reputation of the digital banking could have hampered. Threats recognition is very important for

any innovation idea for a company. Tide then went out to increase its services by the introduction
of new idea and strategies in the business. Another very useful services which was started by the
company was the facilitation of cash deposit services. This allowed the customers to deposit cash
in their accounts by the help of the new partners of the company Paypoint and also Post offices.
This turned out to be a very useful strategy as it benefit the small retailers which did their
business on cash basis. Now these customers were finding it easy to have access to the banking
services digitally and also without visiting any bank (Glushchenko, Hodasevich and Kaufman,
2019).
Recommendations of possible future developments
Disruptive theory it has helped in understanding that how the entry of new entrants into
the market can disrupt the business of Tide digital bank. In the market of this business there is
emergence of new entrants very often and that has affected the business of this bank over the
years. With the help of this theory the threats and opportunities can be identified for this
business. This theory also helps small business for challenging the big competitors which are
well-established. Tide digital bank has been successful in emerging as a small banking institution
with an innovative and achieving success in the UK market. The company has been successful
and has maintained the concept of this theory of innovation by winning the hearts of the
customers and also stealing away the customer base from organizations having outdated business
model. Every thing has been great for this company however as it progresses in the future it
develops the need of new ideas and recommendation for its business (Yavin and Reardon, 2021).
This company has already proved itself that it provide quality in its functions with its
innovative idea. In the future the same strategy will not work. This is because now the company
is itself an established business and according to the theory new entrants will keep entering the
market for disrupting the business of the company. Many existing banks are now introducing
their own version of online banking. Which will give big competition to the business as they
have more capital to invest (Marous, 2017). Thus, the best strategy for this company would be to
try to improve its quality of process. Which means that the company can making innovation in its
existing products for attracting more customers. The company can also introduce multichannel
experience, for example providing the services of making payment of different bills for which
the customers usually have to visit other application. These small feature is basically improving

the sustainability of the products. This small feature will build the relationship between the
existing customers and the company and reduce the risk of loss of customers.
The best facility which Tide company can bring into its digital banking is that it can
introduce end to end digital on boarding. Thus is basically making sure to the customers that all
the transaction which are made by them with the help of the application is secured with the help
of end to end digital on boarding services. These services also allows the customers to make
payment through other apps without risking the loss of their account details. This is very
important to address as it is a threat to the innovation of the company as stated in the disruptive
theory. This company business is digital banking which requires the customers to have a digital
device specifically mobiles. Thus, the company should focus on mobiles. It is understandable
that the company will not be selling mobile phones directly but what the company can do is that
it can provide discounts on purchasing mobiles on online retailer and paying through the Tide
application. This will also motivate the customers to use the application and also increase the
potential customers base of the company.
The company can also provide the customers the facility of providing feedbacks. These
feedbacks will be the suggestions of the services which the customers desire. This will allow the
company to understand the market and the needs of the customers. Feedback will also help the
company to solve the issues which the customers are facing in their services. With the help of
this the company can solve the issues related to its services which is a part of the innovation
theory of disruption. For the growth of the company it can also target the upcoming generation
by introducing services specific to them. This will include to allow the young generation to make
bank accounts which can be started with zero balance. This will allow the young generation
which are students to avail scholarships and also participate in financing activities. Many young
people in this generation have also started earning money with the help of social media. This will
be an investment the company does for its future customers (Kumaran and et.al., 2019).
This business will be now affected by disruptive new emerging business. It is important
for the company that every new business does not disruptive the coexisting one. Thus, the
company can think of doing partnership with other upcoming companies which might have
innovative ideas. And therefore, understanding the correct meaning of the word disruption is
very important in targeting the actual threats. New participant can also benefit when they have a
better understanding of disruption as it will result in finding new opportunities to start and level

the business. Be it a new entrant or any existing incumbent both must choose their battles wisely.
Weather an incumbent looking for ways to defend its market shares and earn profits or an entrant
seeking a chance to grab a bite from the pie, both requires understanding of disruptive innovation
as this approach offers a close up to many valuable idea which can be included in the company’s
business plan.
CONCLUSION
With the help of this project it can be concluded that Tide digital bank has been very
successful in bringing innovation in an already existing and competitive market. With the help of
Disruptive theory of innovation this project helps in understanding the innovative idea which the
company implemented in the business. This project explained how a small business can over
emerge as a new entrant and successfully establish its self in an already existing business model.
In this project the historical developments of the company in its products and services of digital
banking are explained. This project helps in understanding the use of services and there
historical developments for the company according to the Disruptive theory of innovation. The
threats which are applicable to the services of the digital banking of the company. The project
also recommends the company with ways of improving its services and products in the future
with application of disruptive theory. For further improvement in the business of the company it
should try to improve its management and other internal issues which it has faced during the
innovative idea.

REFERENCES
Books and Journals
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Christensen, C.M., and et.al., 2018. Disruptive innovation: An intellectual history and directions
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Glushchenko, M., Hodasevich, N. and Kaufman, N., 2019. Innovative financial technologies as a
factor of competitiveness in the banking. In SHS Web of Conferences(Vol. 69, p.
00043). EDP Sciences.
Goffin, K. and et.al., 2019. Perspective: State‐of‐the‐art: The quality of case study research in
innovation management. Journal of Product Innovation Management. 36(5). pp.586-615.
Haefliger, R., 2020. In the banking sector, what skill set will be required for human advisors to
succeed in a more digitalized industry? (Doctoral dissertation, Haute école de gestion
de Genève).
Irene, B., Opute, A. and Ibidunni, S., 2019. Competency-Based Entrepreneurship Education:
Analysis of the Disruptive Innovation Theory in African HEIs. International Journal
of Business and Globalisation, pp.In-press.
Kumaran, V.V., and et.al., 2019. Mobile Banking Usability Evaluation Among Deaf: A Review
on Financial Technology and Digital Economy Prospects.
Maiya, R., 2017. How to be a truly digital bank. Journal of Digital Banking. 1(4). pp.338-348.
Nambisan, S. and et.al., 2017. Digital Innovation Management: Reinventing innovation
management research in a digital world. Mis Quarterly. 41(1).
Si, S., Zahra, S.A., Wu, X. and Jeng, D.J.F., 2020. Disruptive innovation and entrepreneurship in
emerging economics. Journal of Engineering and Technology Management. 58.
p.101601.
Walker, T. and Morris, L., 2021. The Handbook of Banking Technology. John Wiley & Sons.
Yavin, O. and Reardon, A.J., 2021. What digital banks can learn from decentralised
finance. Journal of Digital Banking. 5(3). pp.255-263.
Online
Marous, J., 2017. 10 Ways to Improve the Digital Banking Experience.[Online] Available trough:
<https://thefinancialbrand.com/62845/digital-banking-experience-strategy-online-mobile/>